Billionaire Trump donor in line to make millions from Thames Water bid | Water industry

Billionaire Donald Trump donor could make millions from a deal between the government and Thames Water.

Britain’s biggest water company is at an impasse as ministers and creditors try to agree a rescue deal that would prevent the collapse of the Thames. The water company built up a debt pile of £17.6bn in the decades after it was privatised.

Elliott Investment Management is one of the leading creditors in a group that includes Silver Point Capital, BlackRock and M&G. A consortium of hedge funds known as London & Valley Water is trying to take over the Thames in a multi-billion pound restructuring.

Paul Singer, the founder and co-chairman of Elliott, one of the finance industry’s most colorful characters, once ordered the seizure of a company. Argentinian navy ship When the country cannot pay its debts. His company is blamed Catalyzing Argentina’s bond crisis by aggressively pursuing the country’s debts.

The Thames bid appears to be a family affair. Sources close to the deal say the point person at Elliott for Thames Water is: Singer’s son GordonHe manages the firm’s London office. In 2024, Gordon attempted to donate nearly £2,000 to Robert Jenrick’s unsuccessful bid for the Conservative party leadership; the money was refunded and Gordon was deemed “unauthorised” by the Electoral Commission because his address was not up to date at the time.

Singer, 81, donated $5 million (£3.73 million) to Make America Great Again Inc, Trump’s Super Pac. tens of millions more Trump allies in 2024, including $37 million to support election Republicans To Congress.

Cat Hobbs, of campaign group We Own It, said: “Trump wants control over NHS drug prices and his mega-donor Singer wants control over our water. ‘Absolutely not’ should be the answer of any government that considers itself patriotic.”

Elliott was part of a consortium that secured a winning $8.8 billion bid for Citgo, the U.S.-based subsidiary of Venezuela’s state-owned oil company, two months before Trump arrested Venezuelan president Nicolás Maduro.

This sale was forced by a Delaware court and was reportedly a “huge discount” as the Venezuelan government valued the company at $18 billion. More money is expected to be made because US companies control the oil produced, which is unlikely to be subject to sanctions.

If the Thames deal is realized, Singer, whom Bloomberg calls “the world’s most feared investor”, will be among those who control the water of 16 million people in London and the Thames valley. He is used to earning a healthy return on his investments, with an average annual return of 14%.

Like Elliott’s style, creditors’ demands on the government are often aggressive; They are demanding that the fines, which could value the company up to £1bn, be suspended for four years. They are also demanding leniency on environmental measures, including pollution, leakage and other performance targets introduced a year ago.

There will already be a tidy profit on the debt: creditors have given Thames a £3 billion loan at a high interest rate of up to 9.75% per annum, to be paid through customer invoices.

Critics argue the deal could allow Thames to continue polluting with impunity.

The deal is also threatened by uncertainty around the Labor leadership; Andy Burnham has said he wants to bring water companies back under public control, claiming he will become the next prime minister if he wins the Makerfield by-election next month.

Lena Swedlow, deputy director of centre-left campaign group Compass, which has close links to Burnham, said: “These people have no interest or business in a water company. They are vulture capitalists, not public service providers. They should not be allowed anywhere near resources that are important to our health, our planet and our national security.”

Clive Lewis, Labor MP for Norwich South and a leading advocate of returning the water industry to public ownership, said handing over the Thames to the likes of Singer and Elliott Management would be like “throwing red meat to the wolves”.

“The fact that he is known as a vulture capitalist should tell you everything about how inappropriate this deal is… these types of people are there to suck the lifeblood out of our utilities and utilities and this deal should not be rushed.”

Regulator Ofwat has been heavily criticized for allowing private equity and international hedge funds to take over UK water companies after 2010, opening the door to making short-term profits at the expense of vital infrastructure improvements and environmental protection. 7 out of 10 are privatized Water and sewerage companies are now controlled by private equity investors, and a similar number of British water companies are foreign owned.

Singer’s modus operandi is to target underperforming public companies, overhaul the board, ruthlessly cut costs, force restructuring and often sell the company.

Government sources say negotiations with creditors are intense. Ministers fear a Liz Truss-style bond market crash that negotiators say will happen if the deal fails and Thames Water goes into private administration. Chancellor Rachel Reeves is said to be terrified, and government sources say she is strongly opposed to such an outcome.

A spokesman for the London & Valley Water consortium said: “Experienced transformation investors have worked constructively and in good faith with regulators and authorities to design an ambitious, long-term turnaround plan that holds Thames Water to account and delivers a step change for customers and the environment.”

A government spokesman said: “The government will always act in the national interest on these matters. The company will remain financially stable, but we are prepared for all possibilities, including resorting to a special management regime if necessary.”

A Thames Water spokesman said: “As we have previously stated and confirmed by the high court last year, customers will not pay the interest cost of Super Senior Funding.”

Although the company claims customers won’t pay interest on the loan directly, a third of every customer bill currently goes towards paying off the debt. The company intended to use some of the funding to pay the interest but this did not happen and Thames’s fund will run out in November, meaning customers will be left footing the bill.

Elliott Investment Management declined to comment.